CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND TO THE STUDY
    According to Banda M. (2002), micro finance industry is about providing finance service to the poor who are traditionally not serve by the conventional financial institution in Nigeria the formal financial system provides services to about 35% of economically active population which the remaining 65% are excluded from the access to financial services. The small and medium scale enterprises falls among the 6% who are not catered for financially. The financial need of most of these small and medium scale enterprises are catered for by the informal financial sector via non-government organization (NGO’s), friends, money under relatives as well as credit unions.
    In order to enhance financial flow to the poor Nigerians who want to start up a small and medium scale business, the government has in the past initiated a series of publicly financed micro-credit programe and policies targeted at the poor. Some of such programe were agricultural credit guarantee scheme (ACGS), people bank of Nigerians community banks (CB), now micro finance bank etc. all these are aimed at empowering Nigerians and local productions.
    Microfinance industry the main source of funding micro enterprises in Nigerian Africa and even other developing regions.
    This study is aimed at undertaking a primary survey of micro finance institution or industry has helped inconditioning poverty in the rural area. It will also examine the framework of microfinance institution and also observed how the operation of micro-finance. To this research work will make a critical education of micro finance institution and wide examination of rural area (concentration on the level of poverty) and how the operations of the institution have helped in reading poverty.
1.2    THE FOLLOWING ARE THE PROBLEMS THAT NECESSITATED OUR CHOICE OF THE TOPIC:
•    Conceptual framework of microfinance and microfinance industry in Nigeria.
•    Reason for the establishment of microfinance banks
•    Regulation bodies and regulatory guidelines the operation of micro-finance industry in Nigeria.
•    Rate of poverty in the rural area.
•    Reason for the increasing rate of poverty in rural area.
•    Impact of microfinance banks in eradication poverty in the rural area
•    Different and drawbacks encountered by microfinance banks while performing their function of poverty eradication.
•    Solution to the problem of microfinance industry.
1.3    AIMS AND OBJECTIVES OF THE STUDY
    The main purpose of this research work is to examine the assessment of the impacts of micro finance banks in eradicating poverty in the rural area. The aims and objective of the study are as follows:
    Examine the conceptual framework of microfinance industry in Nigeria
    Enumerate the feature and the meaning of a rural setting
    Discuss the rate of poverty in rural area
    Highlight the reason for the increasing rate of poverty in rural area.
    Expatiate the role and impact of micro-finance banks in eradicating poverty in rural area
    Examine the problems encountered by microfinance industry and the likely solution.
1.4    SIGNIFICANCE OF THE STUDY
    This research work is descriptive in nature and to describe the impact or roles of microfinance bank/industry in eradicating poverty in rural area. This research work is also beneficial to the micro finance banks because it will examine the problems of micro finance banks critically and potters a solution to the problems.
    Thus, this research will therefore, help in the overall economic development as it will encourage rural dwellers on the effective utilization of the microfinance banks never to them because this research work is describe and will educate the general public on the use of micro finance efficiently and effectively.